‘We Must Tackle Factors Driving Inflation, Unemployment, Insecurity’ – LEADERSHIP NEWS
The Nigerian economy is growing, but the reality with the common man is that life is tougher. Are we seeing impact of figures on living conditions?
Yes, beyond the GDP figures from the NBS every quarter, we need to look at how the high rate, double-digit inflation at 17.38 per cent and unemployment level at 33 per cent are affecting the living standard in the country.
The GDP figures tell of the level of activities in the economy but this does not also define the living standards of the people. We must tackle the factors driving up the rate of inflation, the high level of un employment, and insecurity.
What’s your view on the current exchange rate management strategy by Central Bank of Nigeria (CBN)?
The CBN has consistently tried to boost supply of forex to make the forex market liquid. But we have a case where the supply of forex does not meet the demand and this has put persistent pressures on the naira leading to its weak position against major currencies. Many businesses now source their forex needs from parallel markets at above N525 per dollar. We need to boost the supply side of the forex market through more inflows from exports, diaspora remittances and crude revenues.
Although Nigeria is not new to trade agreements, yet it has not been able to fully maximize the AfCFTA as many manufacturing companies are yet to participate. What may have caused this? How can it be corrected?
The AfCFTA has not taken off operationally even though the agreements and articles have been agreed on by the participating countries. There are still administrative hurdles to resolve, for the Agreement to take off effectively. While we wait on that, Nigeria needs to support businesses with infrastructure support in order to produce at competitive prices for their products to compete in the continent-wide market.
Presently, Nigeria is experiencing a disturbing cost-push. The federal government’s plan for Nigeria’s participation in the African Continental Free Trade Area (AfCFTA) is to capture 10 per cent of Africa’s imports as well as to double the country’s export revenue by 2035. The government also wants to become the preferred supplier of value-added products and services to Africa.
The LCCI has recently organized workshops on the theme: ‘AfCFTA: The Roadmap for Exporters Successful Participation’. The strategic objective would be achieved by growing export capacity of every state in the country to $1.2 billion as well as by focusing on specific product/service chains where the states have comparative advantage and resource endowments. The main focus is on processed agricultural products, services and manufactured products.
The vice president, Yemi Osinbajo had disclosed that Africa cross border informal trade is worth $93 billion. What effort should the government put in place to help the transition of the informal economy and harness the opportunities in the sector?
To have players in the cross border informal sector transit to the formal sector, we need to have clear procedures on cross border trade and easy to comply with all kinds and sizes of enterprises involved in trading across borders. Many of our borders are unmanned, giving room to smuggling and as long as smuggling is lucrative and untamed, most of the players in that space will like to remain informal. We have petroleum selling at higher prices in our neighbouring countries which motivates the movement of this product across borders at all cost.
The FG has taken measures to improve the Ease of Doing Business in Nigeria. Do you think the measures are far-reaching enough to facilitate business and investment?
The country has recorded improvements in its business environment especially in the last five years, based on the World Bank’s assessment through its Doing Business Index. Nigeria’s ranking stood at 131 of 170 countries in 2020, up from 170 of 189 countries in 2016. We have also recorded improvements in the World Bank’s Sub-National Doing Business assessment. The best three sub-national performance as at 2020 were Gombe, Sokoto and Jigawa. There is a difference between registering a company and successfully running a company. So, the index will measure the time it takes to register a company as a positive mark but that does not measure the survival of a company. We expect more to be done in attending to the perennial problems that have bedeviled businesses in Nigeria like power supply, access to cheap finance, forex scarcity, and high rate of inflation.
MSMEs in Lagos complain of being stifled by multiple charges. Are you involved in any form of engagement to harmonise taxes and charges for these small businesses in the state?
At the chamber, we have regular engagement with the State government on issues affecting our members. The chamber was well represented at the 7th Lagos Corporate Assembly that held on the 26th of August 2021 during which we presented different issues affecting the business community. Broadly speaking, in recent years, our advocacy efforts as chamber have centered on better foreign exchange management; implementation of critical port reforms; improving access to funding for businesses especially MSMEs; exploring private-public partnership for infrastructural development; implementation of structural reforms in critical sectors to achieve inclusive and sustainable growth; and ensuring friendly and supportive regulatory environment at the national and sub-national level.
What is the outlook for the economy?
The outlook looks good but with concerns about insecurity, forex scarcity, unemployment and double-digit inflation. Ongoing reforms should be concluded on good notes to improve the ease of doing business in Nigeria. The vaccination programme should also be improved on with the provision of more vaccines. Growth prospects are high but can be disrupted by insecurity, logistics challenges, difficulties in sourcing forex, etc. we need to pay attention on the growth and job-rich sectors like agriculture, construction, trade, entertainment, and technology.
What are your plans for the chamber as DG?
I am a seasoned professional with a broad range of experience. As the DG of LCCI, I am responsible for developing and directing the implementation of strategy to ensure achievement of objectives of the Chamber while ensuring and managing the growth and development of the institution.
I plan to build on the successes of my predecessor, by enhance stakeholder engagement and advocacy with various arms of State and Federal government. It is also critical for me to diversify and grow the Chambers revenue sources and improve efficiency and service delivery to members to increase member engagement. With the support of my team, I will improve the Chamber’s visibility via regular programs and active use of social media. Having worked in various sectors of the economy, and in international development, with a strong network across Africa, I will lead the outreach to the rest of Africa, supporting our members in the AfCFTA journey. In addition, LCCI already initiated the annual AFRICA HALL and AFRICA SPECIAL DAY projects to contribute to the growth of trade within the African continent during the annual Lagos International Trade Fair.
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